Silverbrook admits liability in $870,000 wage underpayment case

Lawyers for Kia Silverbrook say the embattled Memjet inventor admits liability for his alleged $870,000 in underpayments to staff at three of his companies, and hopes an agreement on penalties can be reached with the Fair Work Ombudsman out of court.

Silverbrook did not appear to face the charges for the first time in Sydney’s Federal Circuit Court this morning and instead sent lawyers to plead mitigating circumstances on his behalf, claiming his businesses were driven into the ground by competitors.

Eric White from Adam Wilson Lawyers, which represents Silverbrook companies Priority Matters, which processes patent applications for inventions, and medical research and development firm Geneasys, says in court that Silverbrook had invested $8m of his own money into the companies and was working towards the development and sale of a product expected to be worth $15-30m.

He says the project was besieged by a ‘calculated attempt by a third party’ competitor to damage Silverbrook’s business, and that the companies had earlier been ‘plagued with litigation from an American source’, likely referring to his lost court battle two years ago with his US financiers, who subsequently took over the Memjet business and Australian research facilities.

White says the trouble began around October 2012 and came to a head in March 2013 when Silverbrook was unable to pay the employees until the sale went through, and this never happened.

He says many of the employees were happy to stay on even though they weren’t being paid because of the prospect of sharing in the massive windfall when it eventuated.

Fiona Inverarity at In Legal, lawyer for the third Silverbrook business, solar cell research company Superlattice Solar, also says she thought the one employee owed $55,969 was happy with the situation.

The lawyers implied the attacks on Silverbrook’s businesses and its employees’ apparent willingness to continue working should be taken into account when determining penalties.

Judge Sylvia Emmett set the next court date for December 2 and ordered that statements of facts and issues, agreed upon by both parties, be filed by July 18, evidence by the Fair Work Ombudsman by mid-August and by Silverbrook in September, with replies alternating until the court date.

“It’s so sad, Australian businesses trying to make a go of it and ending up with a tragic outcome for all,” she says.

Both the Ombudsman and Silverbrook’s lawyers hope an agreement can be reached well before the case appears in court again.

Court documents filed by the Fair Work Ombudsman in April allege engineers, scientists, patent attorneys, patent assistants and patent design assistants at three of Silverbrook’s companies were not paid for weeks or months at a time between February and August last year – with one employee owed $166,914.

Geneasys has since entered liquidation after angry employees forced it into court-ordered liquidation late last year in a bid to recover their wages and entitlements, which can only be done once a company is declared insolvent.

Silverbrook’s lawyers say the other two companies are still solvent but no longer trading.

The wind-up application against Geneasys was supported by two of the company’s creditors, totalling $2m in statutory demands, and another successful application against another Silverbrook business, Precision Mechatronics, was supported by 46 creditors with $91,129 in demands.

His Silverbrook Research business is also in liquidation since April 15, but not before being renamed to the innocuous Worldwide Specialty Property Services Pty Ltd.

Silverbrook faces maximum penalties of up to $10,200 per breach, while Priority Matters and Superlattice Solar each face penalties up to $51,000 for each employee underpaid. Charges against Geneasys are suspended as it is in liquidation.

This News article appeared in the JUNE 2014 issue of ProPrint Magazine

Owning up: Kia Silverbrook's lawyers hope charges against him by the Fair Work Ombudsman can be settled out of court.

ProPrint is the leading monthly magazine for the Australian printing industry. ProPrint covers the business and technology issues of print with broad-reaching editorial coverage that includes news, comment, features and product reviews.

ProPrint has developed a reputation as the leading printing industry resource. Our team of journalists provides lively, thoroughly researched and independent news, as it happens. Join now for free and get full access to all our premium content plus our industry news bulletins and deals on products and services.

* Required field

1) Login Details

Username*

* Username required

Email*

* Email address required

* Invalid Email address

Password*

* Password required

Confirm Password*

* Password confirmation required

* Passwords don't match!

2) About You

First Name*

* First name required

Last Name*

* Last name required

Country*

* Country req'd

State*

* State req'd

Job Function*

* Job function required

Company name*

* Company required

Company size*

* Size required

Industry Sector*

* Primary business required

3) Email Newsletters

Receive the latest ProPrint news and reviews directly to your inbox. Select the newsletters you would like to receive below:

Daily newsletter

Daily ProPrint bulletinConveniently delivered to your inbox, the ProPrint newsletter will keep you informed on the latest print industry news relevant to Australian and New Zealand print professionals.

Special Offers and Promotions

ProPrint will keep you up to date with special offers, promotions, competitions and new products.

At no time will your email be provided to any other company.

I agree to the Terms & Conditions and Privacy Policy and acknowledge that I will receive industry news emails as well as emails regarding deals on products and services
*

* You must agree to the terms of the Privacy Policy and Terms & Conditions to register an account

Please check your email

A confirmation email has been sent to your email address - SUPPLIED EMAIL GETS INSERTED HERE. Please click on the link in the email to verify your email address. You need to verify your email before you can start posting.

If you do not receive your confirmation email within the next few minutes, it may be because the email has been captured by a junk mail filter. Please ensure you add the domain http://proprint.com.au to your white-listed senders.